Merchants that accept credit cards from customers for sales transactions receive little assistance in matching payments from their credit card service provider with the corresponding sales transactions. This has been an unavoidable consequence of the way credit card transactions are processed.
In particular, when a merchant accepts a credit card as the means of payment for a good or service, the card is first authorized (e.g., by the credit card's issuer). The sales transaction proceeds if the authorization is successful. At some later time, a settlement request is forwarded to the issuer (or a credit card processor) to recoup payment for the transaction. Upon settlement, funds are generally transferred to the merchant (e.g., to the merchant's bank) as a lump sum corresponding to any number of sales transactions; there is no indication of which transaction or transactions the funds are for.
Traditionally, if a merchant wished to reconcile a settlement payment with corresponding sales transactions, the merchant had to manually identify a set of transactions having an aggregate amount that matches the amount of the payment. This is very imprecise, especially for merchants that handle a large number of credit card transactions, as many permutations of transaction amounts could be represented by a single payment. For example, a payment of $100 could be for a single $100 transaction, two $50 transactions, a $50 transaction and two $25 transactions, etc.
In addition, because the settlement of a specific transaction is rarely specifically reported to a merchant, the merchant cannot quickly and easily identify transactions that failed (e.g., stolen card, possible fraud) or that were reversed (e.g., via chargeback).